The Government of Hong Kong announced today the completion of a green bond issuance, raising $5.75 billion in a triple-currency offering, with bonds denominated in US dollars, Euros and Renminbi (RMB).
According to the Hong Kong Monetary Authority, the offering marks the largest ESG bond issuance in Asia to date.
The deal drew significant demand, with the offering more than 6x oversubscribed, attracting more than $36 billion in orders. Following particularly strong demand for the RMB denominated bonds, the RMB tranches were doubled in size to RMB10 billion (US$1.45 billion).
Prior to the new offering, Hong Kong had issued approximately $10 in green bonds, beginning with its inaugural $1 billion offering in 2019, followed by additional institutional issuances in 2021 and its first retail green bond in 2022. Proceeds from the prior offerings were allocated to projects in areas including Water and Wastewater Management, Green Buildings, and Waste Management and Resource Recovery, as well as Energy Efficiency and Conservation.
The offering comes as issuances of green, social, sustainability and sustainability-linked (GSSS) bonds have grown to a record share of global bond volumes, reaching 16% of the overall market in Q3 of 2022. While bond market volatility has pressured GSSS volumes in recent quarters, issuances continue to outpace those of the broader bond market.
Hong Kong Financial Secretary Paul Chan said:
“We see continued strong demand from global institutional investors for the HKSAR Government’s green bonds despite the recent market volatility. Since our issuance in 2021, we have once again launched a triple-currency issuance this year to demonstrate our commitment to promoting the development of green and sustainable finance in Hong Kong and providing the market with useful benchmarks. In fact, we are the first government issuer in Asia to issue green bonds in three currencies concurrently.”